Innovation ‘sandbox’ finds most ideas need more help, not regulation change

The outcome of Ofgem’s first ‘regulatory sandbox’ suggests there could be more energy innovation within current regulatory arrangements – but innovators need help to navigate complex arrangements.

In a report on the sandbox, which allows the regulator to grant temporary and specific derogations to allow for trials, Ofgem said 30 proposals were received and of those, for 22 there was no specific regulatory barrier to the proposal and they could probably go ahead under existing regulations.

The regulator granted three sandbox arrangements:

  • A consortium led by EDF Energy R&D UK with Electron, PassivSystems, Repowering London and University College London are trialling a peer-to-peer local energy trading platform, allowing residents in urban areas to source their energy from local renewables and trade that energy with their neighbours.
  • Empowered is trialling a local peer-to-peer energy trading scheme. 
  • OVO Energy is trialling an innovative ‘smart home’ tariff for customers with storage heaters who are currently limited to economy 7 or economy 10 tariff options. It will also provide grid balancing capabilities.